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Oil prices slid below $85 a barrel on Friday after Iranian state media reported a proposed peace deal between the United States and Iran that would see the Strait of Hormuz reopened.
The news sent crude prices lower as traders moved quickly to price out the supply-disruption risk that had been weighing on the market.
What the Strait of Hormuz Is The Strait of Hormuz is the narrow waterway connecting the Persian Gulf to the Gulf of Oman, and it serves as the primary exit route for oil shipped from major producers in the region.
That concentration of supply through a single chokepoint means that any credible threat to navigation there — whether from military conflict, a blockade, or political escalation — tends to push crude prices sharply higher.
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